Empirical Analysis Of The Agricultural Intra-industry Trade Between China And South Korea

China and South Korea have a strong similarity in all aspects of the geographical,cultural practices, eating habits, and laid a good foundation for exchanges andcooperation between the two countries. At present, China and South Korea hasbecome another important agricultural trading partner. However, China and SouthKorea agricultural products there are intra-industry trade and inter-industry tradecoexist phenomenon, the low level of trade within the agricultural industry as a whole.Within the trade in agricultural products accounted for lower than the level of tradewithin the major types of industries, which account for a higher level of trade in thetype of industry imports. Based on the above background, the use of the model toChina and South Korea within the agricultural products industry trade bothquantitative and qualitative analysis is essential.After World War II, a new kind of trade situation named intra-industry tradeemerged. Then this trade situation raised up and grew up between the developedcountries. It is defined as a phenomenon which import and export the same type ofproducts in the two countries. It is unable to use the traditional theory of comparativeadvantage to reveal this phenomenon. Therefore, scholars references imperfectcompetition and economies of scale factors to explain intra-industry trade theory bychanging the assumptions of the traditional trade theory. This paper elaborates thedevelopment trend, features and international competitiveness of China and SouthKorea agricultural products. However, intra-industry trade model has some defects.Therefore, it has practical significance. Through the body features for modeling, itre-measures bilateral intra-industry trade of agriculture of China and South Korea,which make the model more models to make relevant recommendations for thebilateral trade.First, paper analyzes the characteristics of the agricultural trade of China andSouth Korea, development of the agricultural trade of China and South Korea, the factors about of the agricultural trade of China and South Korea and the main issuesabout of the agricultural trade of China and South Korea. China’s exports of primaryagricultural products, South Korea to export high value-added agricultural products,the proportion of agricultural trade in the total trade between the two countries show adownward trend. China’s agricultural products of comparative advantage has beenlost.Second, with the combination of the trade gravity model and intra-industry trademodel, this paper re-calculates all kinds of intra-industry trade index of agriculturaltrade between China and South Korea. By changing the values of the factors, we have aset of conclusions drawn about China and South Korea trade in agricultural products.Showed a positive correlation, such as tariff changes and marginal intra-industry trade;the increment of the overall agricultural trade comes from the inter-industry trade; theincrement of intra-industry trade of agricultural products from the verticalintra-industry trade. We have these conclusions what some guiding significance toadjust the industrial structure of agricultural products between the two countries, to signFTA. In short, by summarizing the previous model of intra-industry trade and tradegravity model and combining with the important factors in the bilateral trade, thisarticle establish a measurement model from the perspective of dynamic and static. It ismuch more practical compared with the past simple model of intra-industry trade index.In this paper, it introduced a total of46countries’ various agro-industrial trade dataduring the process of building a model, which makes the model much more reliable.